Guinness proposes N3.20 dividend, records N2bn loss

Guinness Nigeria Plc, manufacturers of brands like Guinness Foreign Extra Stout and Malta Guinness, for the financial year ended June 30, 2016 proposed a dividend of N3.20 per ordinary share.

The company also announced a loss of N2 billion for the financial year under review from N7.8 billion profit recorded in prior year.

The persisted macro economy challenges impacted on the company’s slow revenue and significant increase in finance cost. The company said.

The multinational company revenue dropped by 14 per cent from N118.5 Billion in 2015 to N101.9 billion in 2016 while finance cost rose by 42.5 per cent from N5.6 billion to N7.9 billion in 2016.

Commenting on the results, Managing Director/Chief Executive Officer, Guinness Nigeria Plc, Mr. Peter Ndegwa, in a statement, said the combination of a tough economic environment and challenges with naira devaluation had a significant impact on Guinness Nigeria’s overall performance.

According to him: “Our performance this year was impacted by two major factors, one being the very tough economic challenges around consumer spending, driving consumer preferences towards value brands across the sector, the other, and more significant factor being the effect of foreign exchange policy and the devaluation of the Naira. When you take out the impact of the latter, our underlying performance for the year was broadly in line with the prior year in spite of the pressure on the top line.”

It would be recalled that in January 2016, Guinness Nigeria acquired the distribution rights for Diageo, its parent company’s International Premium Spirits (IPS) like Johnnie Walker, Ciroc and Baileys in Nigeria.

Also, in the course of the financial year, the company acquired the rights to distribute brands from India’s United Spirits Ltd (USL) for brands like McDowell’s whisky. Guinness has also announced an investment of £12 million into its Benin plant for the manufacture of mainstream spirits, locally produced spirits that are offered at a lower price point when compared to imported spirits.

Ndegwa continued: “Following the acquisition of distribution rights for IPS and USL brands, we are the first and only total beverage alcohol (TBA) business in Nigeria offering the widest range of drinks – from adult premium non-alcoholic drinks (APNADS) to lager, stout, mainstream spirits and IPS. This puts us in a great position to continue to offer consumers quality brands, giving them a choice at every category and price point.

“Additionally, innovation continues to be a strong platform for us, we have a highly successful track record with about 60% of our beer and non-alcoholic business now comprised of innovation products launched in the past four years. So innovation continues to be one of our competitive advantages in this market and we have a strong innovation pipeline into F18,” he said.